{"id":10053,"date":"2022-04-24T11:30:14","date_gmt":"2022-04-24T11:30:14","guid":{"rendered":"https:\/\/focus.cbbc.org\/?p=10053"},"modified":"2025-04-23T09:41:37","modified_gmt":"2025-04-23T09:41:37","slug":"how-has-covid-affected-the-cost-of-shipping-between-the-uk-and-china","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/how-has-covid-affected-the-cost-of-shipping-between-the-uk-and-china\/","title":{"rendered":"How is Covid in China affecting the cost of shipping?"},"content":{"rendered":"

More than two years into the Covid-19 pandemic, the cost of shipping still remains many times higher than pre-pandemic rates. Although there is hope the situation will stabilise soon, ongoing lockdowns in Shanghai could continue to push costs up, writes Gary Wilcox<\/strong>, CEO at JAG UFS<\/strong><\/h2>\n

Surprisingly, when the pandemic first hit the UK in March 2020, shipping companies did not immediately follow the increase in airfreight charges with their own. Airfreight rates quadrupled nearly overnight, whereas initially, there was no significant movement in rates on ocean freight until some nine months later at the end of 2020.<\/p>\n

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When the price increase did come, it was explained by the shipping lines as an \u201cimbalance of equipment.\u201d At the time this made perfect sense, as the pandemic hit China\u2019s major export markets \u2014 the USA, the UK and Europe \u2014 with countries in these regions seeing very strict lockdowns. In turn, this meant that when containers arrived at their destination they would be met with major delays due to shortages of drivers to remove goods from the ports, deliver to end users and ultimately, slow turnaround times in returning empty containers back to ports. With many importers having to work from home, there was a backlog at both manufacturing hubs and ports, and vessels were returning to China relatively empty and with very few exports. This is when the export price from China began to rise to accommodate the cost of vessels returning with empty containers. Since then, rates have remained at all-time highs. Industry insiders could see that increases were inevitable. However, the level of increase could be said to be slightly overinflated.<\/p>\n

Importers and forwarders alike, however, could not have foreseen the rate levels that have been imposed by shipping lines. Within three months from November 2020 to January 2021, rates rose by 500%. Ocean rates peaked in December 2021 to a staggering 850% above pre-pandemic rates.<\/p>\n

This has of course had an adverse impact on businesses, not only in the UK but in all of Europe and North America, leading to the unprecedented rises in inflation that we see being reported today.<\/p>\n